Plan sponsors should review their tax-qualified plans annually to ensure that all necessary plan amendments are adopted on a timely basis. This can be challenging because the interaction between the rules for adopting plan amendments contained in new laws, and the administrative rules imposed by the Internal Revenue Service (IRS), sometimes result in complex amendment deadlines. It is important to meet these deadlines because IRS determination letter application reviewers and IRS examiners thoroughly review plan amendments to ensure they have been adopted timely, including for acquired company plans.
For 2016, plan sponsors should consider whether plan amendments are needed to: (1) reflect desired design changes, (2) address items contained in the latest IRS cumulative list of plan amendments, or (3) comply with other new regulatory or statutory requirements. The cumulative list contains the latest regulatory and statutory changes that must be reflected in plan documents. The current list is set forth in Notice 2015-84, which applies for Cycle A determination letter applications (to be submitted through January 31, 2017). https://www.irs.gov/pub/irs-drop/n-15-84.pdf
In the attached alert, we summarize amendments that may be needed for all plans in 2016 (both defined benefit (“DB”) and defined contribution plans), review the document considerations for plans that are scheduled to apply for an IRS determination letter under Cycle A, and provide action steps for all plan sponsors.